The big three western turbine OEMs – Vestas, Siemens Gamesa and GE – left empty handed after bidding for a share of the world’s largest wind project when local Chinese groups swept the board with lower prices.

Five Chinese OEMs shared all the 6GW tendered by state power giant SPIC for its Ulanqab project in Inner Mongolia.

Shanghai Electric secured the largest chunk with 1.4GW after a bid combining machines from its range rated between 3.45MW and 5MW. It was followed by Goldwind and Ming Yang each taking 1.3GW. The two other winners are Dongfang Electric and CSIC Haizhuang, with 1.1GW and 900MW, respectively, after a tender in which 14 OEMs took part.

The Ulanqab tender – one of the first held in China on a competitive, zero-subsidy basis – had explicitly looked for “global top-15” turbine OEMs to bid, in what commentators said was a significant signal of new openness to foreign manufacturers in the Chinese wind sector.

But a source at SPIC told Recharge the subsidy-free nature of the project heaped cost significant pressure on the developer. The three western OEMs were in the most expensive four bids of all the turbine-makers taking part, and despite expectations that efficiency and reliability could be factors in the outcome, price looks to have been decisive.

Shanghai Electric’s low bid of less than 3200 yuan/kWh ($476.5/kW) was 27% below the highest bid from Vestas.

The bids also had to include a 20-year turbine service agreement and warranty, for which SPIC would pay a maximum of 25 Yuan/KW and 10 Yuan/KW annually, respectively, as Recharge previously reported.

The price cap set up for turbine maintenance is new in China, “putting a higher requirement on the OEMs to improve turbine quality control, while continue lowering turbine costs”, a Chinese wind supply chain source told Recharge.

Ulanqab was tendered in five sections, and winning just one would have represented a huge leap forward in the Chinese market for one of the big three western groups.

Vestas, the best-performing last year, installed 584MW in the China in the whole of 2018, a share of 2.8%, according to BloombergNEF figures.

Expectations of a potential foreign winner at Ulanqab were stoked earlier this year when Vestas and Siemens Gamesa both signed their first ever deals with SPIC, covering small deployments elsewhere.

Wind

Vestas, Siemens Gamesa and GE lose in 6GW China wind tender